You Can Still Get a Tax Break for Buying an EV in These 13 States
Although the federal electric vehicle tax credit is defunct, drivers still have a chance to get financially rewarded for buying an EV. Rebates remain available in over a dozen states.
Congress eliminated the $7,500 federal EV tax credit in the GOP tax law signed by the president this past July. In an attempt to soften the impact, some states have expanded their incentive programs. In others, elected officials have doubled down on their commitments to existing programs and begun spreading awareness.
State governments tend to incentivize EV purchases because they want to accelerate adoption, which some see as essential to achieving climate goals. (Widespread EV adoption can improve air quality and offer economic benefits.)
It's easier said than done. States have struggled to find funding for EV incentives in recent years, especially in regions with high EV demand. California, for example, has not had a statewide EV rebate since 2023; in a September news conference, Democratic Gov. Gavin Newsom said, "We can’t make up for federal vandalism of those tax credits."
Meanwhile, General Motors and Ford are touting a loophole that's allowed them to extend the federal tax credit deal on certain EV leases. EV shoppers could potentially combine one of those offers with a state rebate to really save money.
Here are the 13 states where you can still get an incentive for buying an EV, either as a rebate (typically a cash back-style discount) or a credit (a tax break that reduces what you owe):
Colorado
The state of Colorado announced expanded electric vehicle rebates on Thursday, just days after the federal tax credit expired Sept. 30.
"With Congress revoking key incentives that save Coloradans money, we are stepping up," Will Toor, executive director at the Colorado Energy Office, said in a news release.
Starting Nov. 3, rebates of up to $9,000 will be available for new EV purchases through the Vehicle Exchange Colorado program. Used-EV buyers can apply for rebates of up to $6,000. Those amounts are up from current maximums of $6,000 and $4,000, respectively.
However, the eligibility rules are stricter than other states' requirements. To qualify, you must trade in an "eligible old or high-emitting vehicle." EV buyers must also meet income or financial assistance requirements to get the Colorado discounts.
Connecticut
On Wednesday, Connecticut expanded its EV incentive program, officially called the Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR).
The state increased its standard rebate for battery electric vehicles from $500 to $1,000. Low- and moderate-income households may be eligible for additional $3,000 rebates.
Plug-in-hybrid-electric vehicle (PHEV) shoppers can also qualify for smaller rebates.
Delaware
The First State is offering EV rebates of up to $2,500 through the Delaware Clean Vehicle Rebate Program.
"Delaware’s rebate continues," Michael Globetti, a spokesperson for the Delaware Department of Natural Resources and Environmental Control, tells Money in an email. "To be clear, the state’s EV incentive program is a cash rebate, not a tax credit."
The vehicle must have a price tag under $40,000 for shoppers to qualify for the maximum rebate. The cutoff is based on the sticker price for new vehicles and the Kelley Blue Book Fair Purchase Price for used cars.
Globetti said all the latest information about Delaware's EV rebate program is available at driveelectricdelaware.org.
Illinois
Illinois's Electric Vehicle Rebate Program will accept applications from Oct. 28 through Jan. 31.
The rebate amount is $4,000 for low-income applicants (meaning income below 80% of the median for their county) or $2,000 for all others who qualify (income cannot exceed 500% of the federal poverty line).
Funding is limited to $14 million for this fiscal year, and rebate applications are only available while that money lasts, according to the Illinois Environmental Protection Agency. So if you're considering applying, do so ASAP.
Maine
EV incentives of up to $7,500 are available to EV buyers in Maine who also purchase a specific charger designed to power up vehicles during off-peak hours, limiting strain on the grid. (With a discount code, the charger costs $129.)
The EV rebates are offered through Efficiency Maine, an independent energy-efficiency agency that receives government funds. Low-income residents can qualify for $7,500 rebates for new EVs and $3,500 rebates for used EVs. Moderate-income residents can qualify for $2,000 new EV rebates and $1,500 used EV rebates. Leased vehicles do not qualify.
Massachusetts
EV incentives are available in Massachusetts through the MOR-EV program.
The standard rebate is $3,500 for new EVs, with an additional $1,500 rebate open to income-qualifying applicants. The state also has used $3,500 EV rebates and an extra rebate ($1,000) for trading in a gas-powered car for an EV.
Mississippi
The largest electric utility in the state, Mississippi Power, gives a $1,250 rebate to customers who buy a qualifying new EV. A $750 rebate is available for used EV purchases. More information on Mississippi's EV rebate is available here.
New Jersey
Like in several other states, New Jersey's EV rebates have been available off and on since 2020 based on funding. However, since July 1, the Charge Up New Jersey incentive program has been accepting applications, a spokesperson for the the Board of Public Utilities confirms to Money.
New EV buyers can apply for a $1,500 incentive. The Charge Up+ incentive for income-qualifying applicants can add $2,500 to that amount for a total rebate of $4,000.
New Mexico
The Clean Car Tax Credit in New Mexico provides credits of up to $3,000 for EV purchases. Through 2026, the new vehicle credit is $3,000, and the used vehicle credit is $2,500. PHEV buyers can also qualify for credits.
Additional credits for low-income New Mexico residents are offered through a separate program for customers of PNM, the biggest energy provider in the state.
New York
New York's Drive Clean Rebate program can knock up to $2,000 off the price of an EV.
Rebate amounts vary based on range (how far the car can travel on a charge) and sticker price. A state government website notes that over 60 models are eligible. Used EVs do not qualify for the New York program.
Pennsylvania
Pennsylvania renewed its EV incentive program in July, and a spokesperson for the Energy Programs Office says it "anticipate[s] funding being available through at least next spring."
The rebate amount is $3,000 for fully electric vehicles, new or used, with purchase prices under $45,000. Low-income buyers may be eligible for an extra $1,000 rebate. More details can be found at dep.pa.gov/EVrebates.
Rhode Island
The rebate program in Rhode Island, DRIVE EV, provides rebates of up to $1,500 for new EV purchases if the car costs $60,000 or less. The state offers an extra $1,500 EV rebate for low-income residents.
More information about Rhode Island's used EV rebates and PHEV rebates can be found here.
Vermont
Green Mountain Power, an electric utility used by most Vermont households, runs an EV incentive program for customers. The utility provides $2,200 rebates for new EV purchases and $1,500 rebates for used EVs. An extra $1,000 rebate is available to low-income residents.
Other EV incentives in Vermont are listed on the Drive Electric Vermont website.
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